Category: Legal

Year-End Tax Planning Considerations for Business Owners

This article posted in Key Health highlights 10 smart tax planning tips for business owners to tackle before the end of 2024. It suggests revisiting your business structure, retirement plans, and wealth transfer strategies to save on taxes and prepare for the future. You can take advantage of options like bonus depreciation, expensing rules, and the qualified business income deduction to lower your tax bill.

It also reminds online sellers to prepare for updated 1099-K reporting requirements and encourages compliance with the new Corporate Transparency Act to avoid penalties. Plus, there are opportunities to explore energy-related and R&D tax credits for added savings. Whether you’re planning a business transition or just looking to stay ahead of tax changes, now’s the time to consult with your tax advisor and set yourself up for a strong start in 2025.

Evaluating LLC Services for Small Businesses

This article from CNBC reviews five top LLC formation services, highlighting their features and suitability for different business needs. Their review found:

– FileNow: Best for fast processing, offers 24-hour service and a free registered agent for a year.

-LegalZoom: Ideal for access to attorneys, provides extensive legal support and additional features like contract reviews and compliance guidance.

-ZenBusiness: Great for those needing a website, offering LLC formation and website-building tools.

-Northwest Registered Agent: Recommended for registered agent services with added privacy protections.

-Bizee: Best basic package, offering free registered agent service for a year and lifetime compliance alerts.

Check out the article for links to those sites and to read more details about thier findings.


Corporate Transparency Act and What You Need To Do As An LLC

The Corporate Transparency Act (CTA), effective January 1, 2024, mandates that many U.S. small businesses report their beneficial ownership information to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. Failure to comply can lead to significant penalties, including fines and imprisonment. Filing is straightforward – businesses will not incur a fee for submitting their reports, and electronic forms are available on FinCEN’s website.

Bankruptcy Filings May Become More Challenging for Small Businesses

The expiration of Subchapter V, a type of bankruptcy protection that eased the process for small businesses with less than $3 million in debt, means that small businesses will now face more complex and costly bankruptcy procedures. Initially enacted in 2020 and expanded to cover up to $7.5 million in debt during the pandemic, this provision saw higher success rates for reorganization plans but failed to become permanent, leading to a reversion of the debt limit on June 21. To read more, see this article in AP News.

Fighting First Party Fraud

America’s small businesses face unprecedented opportunities and challenges, particularly in combating a potential 40% increase in “friendly fraud” and “first-party fraud,” where customers dispute legitimate charges despite having received the goods or services. Friendly fraud involves genuine customers falsely claiming disputes on their legitimate purchases, posing a significant financial threat to merchants. To mitigate these risks while ensuring a smooth purchasing experience, businesses must balance effective fraud prevention with customer-friendly policies, emphasizing customer education, robust support, and clear communication about transactions.

To read more about this issue, see this post on PYMNTS, a site that provides data, news and insights on innovation in payments and the platforms powering the connected economy.

Protecting Your Intellectual Property – A Look At Copyrights

In this brief segment on ASBN.com (America’s Small Business Network), intellectual Property Attorney, Ana Juneja shares that small businesses, especially those producing digital content, artworks, and photographs, need to utilize copyright laws to safeguard their creations, particularly in the digital and e-commerce spaces.

Recent legal adjustments, including simplification of the copyright process and removal of the mandatory use of the copyright symbol (©), indicate a shift towards making it easier for small businesses to claim protection, ensuring legal advantage and potential financial compensation in case of infringement, while also discussing the significance of the Digital Millennium Copyright Act (DMCA) in protecting online and digital content. See this link to learn more.

Avoiding Common Tax Mistakes

This article from CNET discusses common mistakes that attract IRS scrutiny and offers tips to avoid them, such as completing your return accurately and reporting income correctly, as failing to do so can lead to audits or delays. It also emphasizes the importance of meticulous record-keeping, especially for self-employed individuals claiming deductions, and being cautious with charitable deductions to avoid raising red flags with the IRS.

5 Regulations That May Impact Small Business in 2024

Get ready, small business owners! In 2024, there will be some new rules to follow:

The Corporate Transparency Act means small businesses will need to register with the Financial Crimes Enforcement Network to tackle money laundering.

Good news for now: the IRS delayed a requirement that payments of over $600 via third-party providers like payment apps such as Venmo and Zelle have to be reported.

The Consumer Financial Protection Bureau wants more transparency in small business lending, asking banks to spill details on applicants. This will hopefully highlight potential signs of banks discriminating against borrowers.

The National Labor Relations Board’s joint-employer rule got pushed to Feb 26, 2024, expanding liability for unfair labor practices.

Also, minimum wage hikes in over 20 states and a Department of Labor proposal might extend overtime pay eligibility.

To read more about these changes, see this article in Inc.

Free Legal 101 Resource for Entrepreneurs

Faculty at Cornell University and attorneys at law firm Wilmer Hale collaborated to publish this free resource for entrepreneurs (PDF is also loaded below). The purpose of this booklet is to help startup founders to think early about key items that will set them off on the right legal track.

The booklet covers basics like entity formation, founders agreements, equity incentive plans, tax issues, bank setup, accounting and financial statement basics, HR issues, intellectual property concerns and insurance. The booklet was launched in November 2023 and will be updated over time.

Liftoff-with-Legal-101-for-Entrepreneurs-WilmerHale-and-CornellDownload

Is Your Website Accessible To All?

According to this recent article in Inc., while most small business have websites, many small business owners don’t realize that business websites need to comply with the Americans with Disabilities Act. With a rise in lawsuits against companies for failure to comply, it is in every small business owner’s best interest to understand the rules. Read the article to learn more!